Lululemon’s Kumbaya Capitalism

Lululemon’s Kumbaya Capitalism

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At Lululemon’s lab in Vancouver, where employees test garments. The company doesn’t want a repeat of its pants recall.

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Kamil Bialous for The New York Times

VANCOUVER, British Columbia — The faithful met in a windowed four-story atrium here in early September. Uplifting music played and snacks were passed on trays as the celebratory congregants, many clad in closefitting garments, chattered about a shared vision: that how one feels is as important as how one looks.

Attention turned to a central stairway, and the commanding figure who stood on it. “We are moving from being on the defensive to the offensive,” Tara Poseley said. “We are back!”

Ms. Poseley was then the chief product officer for Lululemon Athletica, the company founded in 1998 and known for its kumbaya capitalism connecting the ideals of empowerment and personal development to $90 yoga pants.

Lululemon is also known for a 2013 recall of some of these pants after it was found that their material was see-through when stretched, leaving a lot of women in downward-facing dog exposed. Matters were made worse several months later when Chip Wilson, the company’s founder and its chairman then, appeared on Bloomberg Television and addressed the issue. “Quite frankly, some women’s bodies just actually don’t work for it,” he said, adding, “It’s about the rubbing through the thighs.”

Turns out that women don’t like to spend a lot of money on yoga pants and then be told they are too fat to wear them. Social-media outrage skyrocketed. The stock price took another tumble. And since, dozens of competitors, from the Gap’s Athleta to Nike to Tory Burch and Derek Lam, have made headway in the market for pricey active wear.

Though largely still built around the peaceful practice of yoga, Lululemon has not given up the fight. Indeed, it seems to be doubling down on the devout yet irreverent corporate culture Mr. Wilson created, though he left the board earlier this year, after selling half of his stake in the company for about $845 million in 2014.

The gathering in the atrium, billed as a Pants Party, was in celebration of a new line of women’s bottoms, which remains the core product for Lululemon. The various designs have names like Naked and Held-in and are being marketed to steer women’s focus from how they look in the pants (not naked, one hopes) to how they feel in them. The atrium floor was decorated with stickers that read, “I feel more locked in than a harness on a roller coaster before it flips upside down,” and “I feel freer than a skinny dip under the midnight stars.”

After Ms. Poseley spoke, the company’s chief executive, Laurent Potdevin, whose résumé includes Toms, Burton Snowboards and (less congruously) LVMH, also took a turn. “Who but you would take our anchor business and turn it on its head?” he said approvingly, in his heavy French accent, to the crowd. “It’s the culture of innovation at its best.”

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Laurent Potdevin, chief executive, left, and Duke Stump, executive vice president for brand and community.

Credit
Kamil Bialous for The New York Times

Spending time at Lululemon’s headquarters is a bit like submerging yourself in an entire Pinterest board of inspirational quotes.

The walls are decorated with adages like “That which matters the most should never give way to that which matters the least” and “Sweat once a day to rejuvenate your skin,” in addition to posted placards that assert the “Vision and Goals” of employees.

Every person who works for Lululemon, from the chief executive to the “educators” who work the retail floors of the company’s stores, is encouraged to articulate a series of personal, professional and health aspirations for the next one, five and 10 years. That also goes for “ambassadors,” who are athletes, fitness instructors and the like who — but primarily for free clothes — receive no compensation as they promote the brand in their local communities.

And the aspirations of the corporation?

“Our mission at Lululemon is to elevate the world to greatness,” Mr. Potdevin said after the party.

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The Lululemon offices.

Credit
Kamil Bialous for The New York Times

Originally set forth by Mr. Wilson, this mission was inspired by a theme of Ayn Rand’s 1957 novel, “Atlas Shrugged,” which posits that self-interest is beneficial to society. (Lululemon has lately removed more explicit Rand references from its company literature. It also discontinued a shopping bag printed with an “Atlas” catchphrase, “Who is John Galt?”)

Mr. Potdevin was sitting in his office, which was spare, with empty bookshelves and stationary bicycles set to overlook the view of this coastal city.

He took the helm of Lululemon about six weeks after Mr. Wilson’s televised remarks. “I expected morale to be down,” he said, but apparently it was just the opposite. “There was a spirit of working together, of being engaged. It was such a disconnect from the outside world.”

He added: “What Chip did, it was wrong, it was a mistake. It was his mistake, it wasn’t the brand’s mistake.” Mr. Wilson declined to comment.

Mr. Potdevin’s strategy is essentially twofold: to grow the men’s business (recently with loosefitting pants designed to give their genitalia breathing room) and to expand globally. To accomplish this, he has brought on a new chief financial officer, as well as new executives to lead digital, “brand and community” and design — all men.

He also said he has tweaked the company culture, putting less pressure on employees to take, as they have for years, Landmark Forum personal-development seminars (though many still do, and the company pays for them, along with fitness classes).

“I don’t think it’s one size fits all in personal development,” said Mr. Potdevin, known to many of these employees as L.P. “Some people find it through yoga, some people get that through meditation, some people might get that through Buddhism or some through sweaty endeavors.”

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An on-site meditation class.

Credit
Kamil Bialous for The New York Times

And some find it online: Lululemon ambassadors have access to a private social network, or “Commons,” where they can connect and share their experiences, and which Mr. Potdevin hopes to take, in some form, to the general public. “I think we’re incredibly well positioned to develop a curriculum that develops the leadership that we have around the world,” he said.

In the patois of idealized consumerism that has become common in the 21st century, he refers to Lululemon loyalists — employees and customers — as “the collective.”

No longer part of the collective, however, is Ms. Poseley, the chief product officer, who was fired this week, with Mr. Potdevin reorganizing the management structure. On Friday, the company’s stock price closed the week down 9.8 percent.

“I want to kick off with some love,” said Duke Stump, as he stood in a second-floor hall filled with mostly female employees, many decked out in Lululemon.

Mr. Stump, the company’s executive vice president for brand and community, was leading a monthly meeting called “the Brand Bonfire,” two days after the Pants Party.

“There are a lot of good vibrations,” Mr. Stump said, noting that the new line was selling well. Then he moved on to the other agenda items, like giving “gratitude” to “teammates” and asking new employees to introduce themselves.

“Hi, I’m Bill and I’m very happy to be on board,” one said.

“Welcome, Bill!” the team called out in unison.

The gathering had the aura of an Alcoholics Anonymous meeting, but the only discernible thing the people in the room were addicted to was loving their jobs.

Sarah Harvison, Lululemon’s global yogi program manager, came forward to make a presentation about Forlise, an experimental community-building store in Whistler, British Columbia, which came to be after a company executive noticed a “for lease” sign in a local storefront. (“For lease” equals “forlise,” with a fortuitous echo of the Beethoven bagatelle “Für Elise.”) It offers bicycle-tuning clinics and “stretch sessions” to introduce men to the brands.

“ ‘Yoga’ is a little intense for the ‘Whistler’ guy,” Ms. Harvison said.

Mr. Stump thanked her for the presentation. “This decentralized love is part of our special sauce,” he said.

Along with the sauce, Lululemon executives constantly extol their “decentralized” model. The company does not sell to wholesalers; its stores are run as individual endeavors, part of a larger fief. “We have primarily young women in their 20s essentially running $15 million to $20 million stores independently,” Mr. Stump said.

The whole operation has been backed since 2014 by an in-house research and development lab, opened in the center of the Vancouver office and encased in glass walls that frost over to assure the privacy that innovation (formerly known as spitballing) requires. It is run by an internal team of engineers and scientists called Whitespace.

The lab is a Wonkaville for athleisure gear. There is a weather chamber that simulates extreme heat and humidity, letting the company determine the effect of elements on materials, seams and other details. There are washing machines to test how well garments withstand the spin cycle. And there is an enormous treadmill built into the floor, surrounded by video cameras to help map out the stretch of seams and — that bugaboo — coverage of material.

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Testing in the lab’s pool.

Credit
Kamil Bialous for The New York Times

But above all, Mr. Stump emphasized, the company is recommitting to the ideals of vision and goals. To do so it has been leaning on David Ogle, at 29 already a company veteran of more than six years, who has become something of a vision and goals guru in the company’s “people potential” department (a.k.a. human resources).

“We don’t do it to drive business success, and as a result, people feel loved and engaged — and that’s our secret sauce,” said Mr. Ogle, sitting in a third-floor open space against the backdrop of a mural that read, “Stretch Your Head.”

He spends most of his time working as an on-site life coach, training managers on how they should set their own vision and goals and help employees make good on theirs. Once, Mr. Ogle set a goal of being the successor to one longtime Lululemon executive.

“It was a terrible goal,” he said now. “We call them ‘looking-good goals.’ Looking-good goals are goals that are created out of ego.”

But Lululemon encourages employees to embrace failure, and Mr. Ogle did. “I learned something even with my looking-good goal,” he said. “It’s that I love leadership, and as I grow and develop as a human being, it comes back to a conversation of legacy: What is every moment of my life creating and generating that will lead me to where I see myself in years?”

Now Mr. Ogle’s goals include having “completed an education in leadership/neuroscience” by 2018 and becoming “an influencer in the realm of masculine leadership” by 2024.

Mr. Stump, meanwhile, said the company has helped stretch the contours of his masculine leadership, previously honed as a student at Choate Rosemary Hall and with jobs at Nike and Seventh Generation. “I’ve learned that what can appear to be really irrational thought can be beautifully rational,” he said. “I’ve learned that creating a culture of trust creates beautiful magic in abundance.”

He admitted that when he took the job with Lululemon less than a year ago, he was skeptical. The company’s reputation had been battered along with the stock price, and Mr. Stump was prepared for gloom.

“I thought for sure I was going to walk in and it was going to be a morgue,” he said. “And I walked in and it was like walking into Oz. I thought, ‘Do these people not know that Rome is burning?’ But everyone here seemed so vibrant and happy and positive.”

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